Taobao Special Price Version And Pinduoduo'S Fight For Consumer Profits

In the sinking market, Ali has never given up fighting with pinduoduo.

According to Caixin, Taobao's special edition recently released its offline "1 yuan store" plan. The products of "1 yuan store" come from 1.2 million industrial belt merchants, and a considerable part of them are sold at 1 yuan price. Taobao plans to expand 1000 "1 yuan stores" in three years. The offline "1 yuan store" is part of Taobao's special price version of "factory goods window plan". In addition to the $1 store, Taobao also recently launched a "1 yuan more fragrant Festival", with up to 100 million pieces of goods sold directly at the factory price of 1 yuan.

And Taobao reply Yibang, the above information is not Taobao official release.

But to be sure, "1000 offline 1 yuan stores in 3 years" is not simple.

The foreign trade factories from b-end to C-end are lack of digitalization and fine-grained operation ability. It is still unknown how willing these factories are. According to Yibang's understanding of the 1.2 million industrial belt businesses mentioned by Ali, not all products and categories are in line with online fast sales. However, the slogan of "new brand plan" was called out two years ago, and the slogan of direct connected factories is rarely heard now.

Face up to the battle

As for the "1 yuan store" and "gengxiang Festival", a group of figures repeatedly mentioned by the media is that the special edition of Taobao integrates 145 industrial belts, 1.2 million industrial belt merchants and 500000 factories to participate in factory direct sales.

In other words, factory direct selling is the most important link.

And Taobao special edition launched "1 yuan shop" and "more fragrant Festival", which means a lot to the standard spelling. In July this year, pinduoduo launched the "Zhenxiang Festival" in a low-key manner, with 100 million yuan of targeted subsidies for some products. Just two months later, Taobao launched "more fragrant Festival" and "1 yuan store".

The purpose of "1 yuan store" is to enhance user stickiness and attract offline traffic to the online market with low-cost factory goods.

Wu Daiqi, CEO of Shenzhen siqisheng, told Yibang: "the launch of the 1 yuan store is Alibaba's" water storage "for double 11. It can be understood that Ali is storing a bigger pool for double 11 and pulling online consumers to Taobao. In fact, Ali has already tasted the sweetness as early as 618 this year. "

Many media reported that during this year's 618 promotion, Taobao's special edition had tried water for 1 yuan in a special zone. According to Alibaba data, on June 15 alone, Taobao's special edition had more than 1 million new registered users. In addition, during 618, the order volume of c2m (customer to manufacturer) goods on Taobao's special edition increased more than five times compared with the same period last year.

618 order outbreak also let Taobao special edition more firm low price long-term strategy.

Wang Hai, general manager of Taobao's c2m business unit, said in an interview with the media that the special price version will adhere to the cost-effective line. At the same time, the special price version will set "more than 90% of c2m products" as the target of this year.

In order to compete with pinduoduo for low price, the special price version also bears the subsidy of "1 yuan free mail". According to Wang Hai, if the price of the 1 yuan package mail activity started in June this year is less than the cost, the platform and businesses will jointly subsidize it.

Ali's abacus

In fact, Taobao's special edition was born in 2018. According to 36 krypton, the Taobao special edition launched in March 2018 bears the heavy responsibility of benchmarking and spelling out a lot. At that time, Ali intended to occupy and sink the user's mind with the low-cost commodity of "9.9 yuan package mail". However, due to the uncertainty of long-term strategy and playing method, the data performance was not very good. Taobao will officially reply to this issue on March 2020.

However, Qimai data shows that from March 2018 to August 2019, the ranking of Taobao's special edition app has been extremely unstable, and it has been drifting away from the top 50 of the shopping (free) list for a long time.

Until March this year, Ali made it clear that "juhuasuan focuses on the downward trend of big brands, and Taobao's special price version focuses on c2m white card", the products of the industrial belt and industrial base have become the product sources of the special price version. After the restart of the Taobao special edition will be based on the white brand of the factory, giving up the dependence on the original Taobao brand. Three months later, Wang Hai, general manager of c2m business unit, mentioned that the special price version of c2m products will exceed 90% by the end of this year.

The release of the signal is self-evident: the special edition and the factory will be more closely bound.

The c2m mode of direct connection between users and manufacturers directly shortens the distance between manufacturing industry and consumers. At the same time, the deep collaboration between the platform and the upstream of the supply chain can not only guarantee the supply of goods, but also give the platform the voice in pricing.

Wang Hai once told the media that Taobao's special price edition is a very big blue ocean around industrial factories and direct to consumers.

Wang Jianguo, chairman of Five Star Holdings, also told Yibang that the direct connection of factories bypassed distributors, reduced the circulation of commodities and essentially improved the efficiency of retail.

After the restart of the Taobao special edition also live up to expectations. According to Qimai data, since July this year, the ranking of Taobao's special edition has been rising all the way, and it has almost always been in the top 3 position since September. According to the data of mob Research Institute, as of May 2020, the user penetration rate of pinduoduo in the sinking market was 59.8%, compared with 54.6% of Taobao, and the penetration gap between pinduoduo and Taobao was shortened from 6% in 2019 to 5.2%.

In terms of user growth, according to trustdata, in September this year, the monthly net increase of Taobao's special price edition was nearly 20 times that of pinduoduo in the same period; as of September this year, 30.9% of the net increase of special price users in the sinking market had gone to Taobao special price Edition. In Taobao hit 800 million months of living ceiling, the special edition has become Taobao new traffic growth point, c2m mode is an important grasp.

In fact, Taobao has already tried c2m. In November 2018, Taobao's daily special price was upgraded to daily special sale, and IOT (Internet of things) digital transformation was carried out for small and medium-sized factories. As a matter of fact, different from the ways of gathering cost-effective and Taobao, focusing on rush purchase and group competition, the daily special sale enlarges the role of direct cooperation with factories and reverse customization. At that time, Taobao announced that it would connect the factory capacity data with online stores to realize zero inventory in the factory.

From the perspective of thinking, the expansion of Alibaba c2m was mostly based on the internal businesses of Taoxi, but the scarcity of internal businesses has become a constraint. Since last year, Taobao has made great efforts to expand the national industrial belt and industrial base. Since 2018, Taobao has launched two major plans of "Tiantian factory" and "c2m production area". It has announced that 10000 factories and 100 digital industrial clusters will be upgraded in three years. Undoubtedly, they are all blood transfusion for Ali's supply chain.

After the restart of the special edition in March this year, 1688 merchants under the B2B business group will be introduced as important business resources, which to a certain extent eases the problem of commodity supply of the special edition. Taobao responded to Yibang, and officially got through with Taobao's special price edition in September 1688 this year, strengthening the supply of the industrial belt.

Zhilian factory was also one of the important strategies of pinduoduo. In December 2018, pinduoduo put forward a huge "new brand plan": it helps to open up the production and consumption side by providing flow support, commodity exposure and recommendation resources to the agent factory. At that time, pinduoduo even called out the slogan of supporting 1000 factories in 2019.

In other words, Taobao and pinduoduo have been competing for c2m.

In addition to the confrontation with pinduoduo, the unsalable goods of foreign trade factories caused by the black swan incident also accelerated Ali's transformation plan for foreign trade factories. According to the General Administration of customs, in the first half of this year, China's total import and export value of goods trade was 14.24 trillion yuan, a year-on-year decrease of 3.2%; of which, the export value was 7.71 trillion yuan, a year-on-year decrease of 3%.

"Overseas orders default, many factories' products are unsalable and can't be sold, so they can only be sold at home. As a result, many enterprises are forced to transform to online retail, which has become an opportunity for Ali." Li Hai (pseudonym), who has been dealing with foreign trade factories for a long time, told Yibang.

In September this year, Ali launched the "trading brain", which fully opened up 1688 and the special price version, combined with two modules of digital customized order and c2m factory goods retail, so as to realize the transfer of foreign trade factories to domestic sales.

Can the abacus work?

But c2m is not so easy to do.

First of all, from the perspective of category, most factories are not suitable for C-end transformation.

Wang Jianguo, chairman of Five Star Holdings, told Yibang that the products suitable for retail must be fast-moving consumer goods with high frequency and just need. "Similar to air-conditioning appliances and furniture, also need to rely on small B dealers to provide installation, after-sales service, these are not suitable for c2m." In fact, the current OEM factories are scattered in the production of cloth, bulk electrical appliances and furniture, which are not FMCG products.

Li Hai holds the same opinion: "the high-frequency products like daily washing and protection are more suitable for retail."

Secondly, a large number of OEM factories follow the most simple business model of "production on order". They lack core digital management, marketing and production capacity.

After the epidemic, Yurou (pseudonym) once helped a foreign trade clothing factory to transfer its stock to domestic sales. She told Yibang that because the size and style of domestic users are different from those of foreign countries, the products need to be redesigned. Even so, after nearly two months of docking with AI stock, the first product of the OEM factory was delayed to go online.

"This time is very exaggerated. The OEM does not know how to design and produce according to the needs of customers. What they will do is to produce when they have orders. That's all." Yu Rou said.

Mengfang group (love stock) also told Yibang that foreign trade factories will encounter acclimatization when they switch to domestic sales because of the epidemic. The specific digital problems are as follows: first, they don't know the preferences of online shopping groups, and they don't know how to select and create their own popular products; secondly, factories don't know how to build e-commerce teams; finally, factories specializing in foreign trade do not have the concept of brand.

"As a result, we have been doing OEM all the time." The group added.

The most important thing is the willingness of the factory to transform itself. For most of the OEM companies, the online transformation often needs to sacrifice profits in exchange for sales. Whether it's Ali or pinduoduo, it's basically using low-cost goods to break through the low-end market. With the help of a low-cost commodity, it can quickly create popular money and quickly digest the inventory of the factory. But when the market situation is not clear, the final result is often that orders and profits are difficult to guarantee.

Wang Jun (pseudonym) works for intelligent electric toothbrush manufacturers at home and abroad. In 2018, he settled in pinduoduo. At the beginning of the launch, they had to sprint to reduce sales. "We focus on the price of 9.9 yuan to 39.9 yuan in pinduoduo, and more often it is 9.9 yuan. This price is actually cheaper than OEM." Wang Jun told Yibang that in 2018, in the case of his own profit reduction, pinduoduo gave the flow, making the sales volume tens of thousands smaller, but the effect has been unsatisfactory.

For the effect of the decline, Wang Jun believes that pinduoduo's continuous price reduction, further squeezing the profit space of the agent factory. "Pinduoduo pushed down the price too much, and finally the cost was not enough, so we didn't focus on this area. There will always be a group of people who are willing to make a long-term loss, and they can't fight for the price. " In this case, Wang Jun will focus back to receive brand orders.

In Wang Jun's opinion, enterprises that are really suitable for domestic sales must have very low customer order requirements, so most factories with high customer orders are not interested.

Focusing on foreign trade factories, this switch to domestic sales can not be separated from a background: after the epidemic, a considerable number of foreign trade factories' orders have dropped sharply. In order to survive, enterprises can only temporarily switch to domestic sales. But after the recovery of foreign trade, how many factories used to the simple and crude mode still want to stay in the e-commerce platform to cultivate scattered C-end retail customers?

A business person in charge of one of the top ten counties in Zhejiang Province told Yu Rou that in the past, when internal retail meetings were organized, all the enterprises were employees, but the boss did not come because they were grasping foreign trade orders; after the epidemic, the boss began to come because he wanted to transfer to domestic sales; but recently, the boss has disappeared, because foreign trade is showing signs of recovery.

"For small and medium-sized factories, living is more important. Who will stay to concentrate on transformation and domestic sales?" Yu Rou said.

Wang Hai has also hinted at the difficulty of turning foreign trade into domestic sales, "we are now concerned about whether we can promote the transformation of manufacturers to retailers in the industrial belt." It is conceivable that foreign trade factories, which were only responsible for receiving orders from the brand side, are now turning to serve consumers.

"Let the world have no difficult business", this sentence has been regarded as the standard by Ali. Only on the c2m Road, the willingness of the factory and the low-level digitization degree may become obstacles to the e-commerce platform.